Gene Logsdon: What’s Your Game Plan As Corn Prices Skyrocket?


From GENE LOGSDON
The Contrary Farmer

Forgive me for returning to this topic again, but history is being made in the corn market and the mainstream press isn’t paying attention. Corn prices hit an all time high last week. As you pull on your boots and head for the garden or fields for spring planting, what are your plans? Are you ready for some seismic changes in food prices? Do you feel too helpless to do anything much but keep on hoeing? Am I overreacting?

Corn recently made it well into the $7.00 plus per bushel range, to an historic high, and a rise of about a dollar a bushel from the week before, indicating how eradicate the market has become. As I write this, the market is bobbing up and down around $7.50 like a basketball during March Madness. The USDA just came out with a report in which it said, much to the surprise of nearly everyone, that corn stocks remain unchanged. But then the experts came on with a litany of “it depends” about how one should interpret the meaning of “unchanged.”

We’ve heard for months now that corn was in short supply. There are a number of reasons, supposedly. The demand for ethanol was going up, supposedly. The ethanol plants were buying more corn, supposedly. Other countries were importing more corn, supposedly. Weather outlooks are iffy, supposedly.  I can write more sentences ending with the word ‘supposedly’, but what’s the use. Even the grain traders are saying they don’t know what’s happening.

You can read all this stuff in the farm news yourself. I don’t really care to hear any more ‘supposedlies’. I just want to know the what of it, not the how or why. At the livestock auctions in eastern Ohio last week, buyers and sellers were talking glibly of ten dollar corn by this summer, lamb prices over four dollars, and heaven help the cattle market. If you happen to be raising your own calves for meat right now, you could not have a better investment IF you aren’t feeding them seven dollar corn.

Others at the auctions were convinced there is going to be crash. Even farmers who still have last year’s corn to sell (not many), looked at me and said: “this is not good.”

The National Corn Growers Association and food wholesalers and retailers are at each other’s throats over the way ethanol appears to be driving up the price of food. The chairman of Nestle’s has been particularly strident in his criticism, really ripping the corn growers and the ethanol suppliers and especially the government’s generous subsidies to the ethanol plants, insisting that the world needs all its tillable land for human food, not car fuel. I think he’s right, but the corn growers are lashing right back, declaring that the food industry’s attacks are inaccurate, unwarranted, etc. etc.

This much I know from history. During the Irish famine, the landlord farmers of Ireland continued to sell their oats to England where they could get a better price for it than from the starving Irish, until the government stopped them. I am way too pessimistic to think that could not happen again. There are plenty of people who would choose to use corn to feed their cars, boats and airplanes rather than starving people.

What if food shortages really do develop, even temporarily? What are we supposed to do in anticipation? Maybe everyone who knows how should plant their backyards to corn. No, I don’t have seed for sale— I’m not trying to take advantage of the situation. I am just thinking that if corn goes to ten dollars a bushel, I could plant and harvest five acres by hand real cheap, and at 200 bushels per acre, have $10,000 worth of corn.  Farmers, for sure, are planting more corn according to reported government planting intentions, so why not the rest of us.

Well, not all of them. One of my favorite contrary farmers, who farms about 800 acres near me, called to tell me that he was once more going against the flow. He is planting all soybeans this year, no corn it all. I’d accuse him of reading my novel, “Pope Mary” who did the same thing, but I don’t think he’s ever read a book in his life.
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2 Comments

Granted, the corn situation is quite complex, but short term price rises are due overwhelmingly to commodity speculation. A careful explanation of how this astronomic scale swindle is available in Matt Taibbi’s new book GRIFTOPIA: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. Chapter Four: Blowout: The Commodities Bubble.

People reading this chapter carefully are likely to develop a very critical attitude toward this article.

That said, the analogy with pre-famine Irland is apt. Concentrated wealth is again in a position to begin exterminating us useless eaters. Plant potatoes. I am.

herb

I’m growing corn. And dry beans, milo, wheat, oats, barley, peas, sunflowers, and potatoes. Some for me and local people, and some for the chickens and hogs- also for me and local people.

As soon as I can get my hands, and tractor, on a sizable (20 acres or more) piece of land I’m going to grow safflower for biodiesel. I’m planning on prolonging getting off the tractor as long as possible so I want to figure out how to feed it too. My rotator cuff isn’t too fond of doing everything by hand.

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